MNI: Australia RBA Private Sector Credit Slows in 2017

By Sophia Rodrigues

     SYDNEY (MNI)  - Private sector credit data for December published by the

Reserve Bank of Australia on Wednesday: 

                             December      November      December      November

-------------------------------------------------------------------------------

                         % Change m/m  % Change m/m  % Change y/y  % Change y/y

Total Credit                     +0.3          +0.4          +4.8          +5.2

Housing                          +0.4          +0.4          +6.3          +6.4

-Owner-occupier Housing          +0.5          +0.5          +6.4          +6.4

-Investor Housing                +0.3          +0.4          +6.1          +6.5

Business                         +0.2          +0.5          +3.2          +4.2

Other Personal                    0.0          -0.2          -1.1          -1.2

     FACTORS: Total private sector credit growth slowed in December, taking the

y/y growth pace below 5% and to the lowest since May 2014. The slowing in total

credit growth was largely on account of other personal credit and business

loans. Personal loan growth on a year-on-year basis fell for 24 months in a row

while business credit posted the slowest y/y growth rate since May. Housing loan

growth month-on-month rose 0.4% in December but the y/y rate was the lowest

since December 2016, mainly due to decline in rate of investor housing credit. 

     TAKEAWAY: The continued slowing in investor housing credit growth is a

welcome development, but given the overall slowing in housing market activity,

financial regulators may be worried about pushing down too hard on investor

lending. The continued decline in other personal credit is a positive as far as

build-up of household debt is concerned but it may have dampening influence on

the economy if it is a sign of household reluctance to spend. 

--MNI Sydney Bureau; tel: +61 2-9716-5467; email: sophia.rodrigues@marketnews.com

[TOPICS: MTABLE]